Amid the ongoing shift toward value-based care — and away from fee-for-service payment models — providers in senior care are still navigating in the dark, especially when it comes to working with payers and other third-party stakeholders.
Those aren’t not always the easiest relationships to cultivate, they’re learning.
But creating relationships based on trust, understanding the long road to scaling value-based models and finding new avenues to value are some of the keys to a successful partnership, according to those with experience.
“When making these value-based arrangements, the providers have to come to the table willing to do something differently,” Gwen Guillotte, chief revenue officer of LHC Group Inc. (Nasdaq: LHCG) said during a panel at Aging Media Network’s Continuum event last week. “The starting point has to be that we’re at least making money on the base payment. The incentive has to be meaningful to the extent that the incentives can align with things that we’re already doing, because it allows us to scale our processes and our systems to accommodate that. Those are some of the factors that come into play: scale, meaningful financial risk/reward and an acknowledgment of when processes have to change, what it takes to get that accomplished.”
The Lafayette, Louisiana-based LHC Group has about 29,000 employees that deliver home health, hospice, home- and community-based services and facility-based care in 36 states and Washington D.C.
Guillotte described the process of a provider like LHC Group getting to the table with value-based agreements as “hard and painful.”
LHC Group has a bevy of those agreements in place – with Medicare Advantage (MA) plans, for instance – and they range from extremely profitable to barely breaking even.
“We have a really strong value-based relationship that’s based on total cost of care and that’s kind of our gold standard,” Guillotte said. “And then all the way down, we have one where we might be able to afford a cup of coffee on the way to visit the patient. That one is not meaningful and so we’re not going to change our behavior based on it.”
LHC Group, like Amedisys Inc. (Nasdaq: AMED), Enhabit Inc. (NYSE: EHAB) and other top home health players, are trying to turn these relationships into ones that are worthwhile from a financial perspective. If they do, the argument can be made that all would benefit: the payer, the provider and the beneficiary, who won’t be denied care.
Perhaps no one has a better perspective on this than Helion, the somewhat new home- and community-based services division of Highmark Health. Highmark is a payer-provider hybrid, and Helion has created a narrow network of home health providers in value-based arrangements with it.
“It was a painful [process],” Nick Stupakis, vice president of Helion, said on the panel. “When I think about our mission and vision, our post-acute care networks were taking care of so many of our patients. From a payer perspective, all of our value-based incentives were all geared towards hospitals and doctors. The truth is, if hospitals and doctors were going to fix everything, they would have done it already.”
That’s why the company created a reimbursement structure that was episodic in nature and had a simple framework for home health providers, Stupakis said.
“If you take really sick patients and you take better care of them, we’ll pay you more money,” Stupakis said. “It doesn’t happen overnight. The model that we’ve deployed is actually an upside-downside model. There is actually some downside risk. But we know that our home-based care agencies that are now more mature can actually get the upside.”
Scaling and creating value
Taking these agreements to scale is also a hurdle in these arrangements. .
Helion has about 200 home health agencies in its network. When it started getting into value-based incentives, the company tried to implement them with just one agency as a pilot. It didn’t work, Stupakis said.
“The program that we had to develop took us three years,” he said. “We had to build it at scale. We had to build something that we could offer to every single home care agency. We didn’t just change. We didn’t create a value-based structure. We changed the way we pay people. We fundamentally created a reimbursement model that is proprietary to Highmark that no one else is using. That’s the only real way to get to value-based care.”
If providers and payers can prove that a model is scalable, then it becomes that much more valuable, and less of a pipe dream.
There’s also value in the process.
“The old standbys are going to be your readmission rates and ED utilization, but we look a lot at length of stay,” Guillotte said. “I think the single most important thing that home health providers can focus on when it comes to spend is to be very disciplined about the length of stay for that patient.”
There is also a lot of talk about adding value with more advanced care in the home, Guillotte said, and she agrees that is a great concept.
On the flip side, LHC Group has been trying to focus on payers who need a specific service: a line of sight into the home once a patient is discharged.
“I’m always looking to see where we can free up money that can come back to us,” Guillotte said. “Taking that money from advanced settings and plowing it into the home is good, but also figuring out, where are we there already? And can we deliver the care a little differently and save on that side of the equation?”
Partnerships built on trust
Oftentimes, creating those relationships can be boiled down to one key factor.
“We want trusted partners,” Stupakis said. “We want people that we trust that are going to actually do what they say they’re going to do. Relationships matter. It’s hard work to build relationships, but you have to be willing to do it.”
David Webster, the chief clinical and provider strategy officer of the Minnesota-based health plan Medica, echoed those thoughts.
“Our focus is being the trusted health plan of choice,” Webster said. “Working with providers and provider systems and understanding the capabilities to create a relationship based upon trust is a win-win. How do you get there? By understanding needs, being frank about the opportunities for both of us and always striving to be better.”